By Drew Johnson

Friday, Oct 24th, 2008 @ 1:15 pm

General Motors has reportedly passed a major milestone in its Chevrolet Volt electric car program, signing LG Chem as the EV's battery supplier. GM has yet to confirm the deal, but is expect to make announcement about the contract sometime in November.

The Volt's lithium-ion batteries have been seen as the vehicle's linchpin, with the deal likely indicating the Volt's biggest obstacle has been overcome.

According to Reuters, GM has inked the Volt's battery contract with Compact Power Inc., LG Chem's Detroit-based unit. A partnership between Continental AG and A123 Systems was also in the running for the Volt battery contract, but ultimately lost out to Compact Power.

Although Continental AG and A123 Systems did not land the contract, sources close to the situation have indicated that both companies will remain part of the Volt project. GM is keeping both sides in the mix with the hope that competition will drive down costs and improve the overall system.

All eyes will now be squarely focuses on Compact Power as it will be one of the first companies to supplies lithium-ion batteries to the automotive industry for high-volume use. GM has targeted a 40 mile all-electric range for the Volt, which is slated to hit the market in late 2010.